BlackBerry Ltd CEO Thorsten Heins asks for patience at AGM

Chief executive Thorsten Heins is again asking shareholders to remain patient, this time as Canada’s embattled smartphone maker enters the second phase of its ambitious turnaround plan.

After shareholders voted on Tuesday to retire the Research in Motion Ltd. identity for good, Mr. Heins assured investors at the company’s annual general meeting in Waterloo, Ont., that the tech firm — despite the formidable challenges it still faces — is on the right track.

He also reminded those in attendance of the dire straits BlackBerry was in this time last year, before highlighting the “significant changes” the company has implemented as it looks to regain its footing.

Mr. Heins announced the company’s new name at the BlackBerry 10 launch event in late January.

Since taking control of BlackBerry in January of last year, Mr. Heins has overseen the launch of the long delayed BlackBerry 10 platform – as well as the first three BlackBerry smartphones to be powered by the software – trimmed more than US$1-billion in costs while vastly increasing the company’s cash reserves.

However, after posting money losing first quarter last Friday that fell short of Wall Street expectations and reporting BlackBerry sales that disappointed analysts, questions are once again being raised about whether or not BlackBerry can compete in a market now dominated by Apple Inc.’s iPhone and smartphones running Google Inc.’s Android software.

In front of a packed auditorium on the University of Waterloo campus, Mr. Heins told the crowd that BlackBerry has moved beyond the first phase of its comeback plan, and is entering a phase that will see fiscal 2014 as a year of investment and growth for the company.

Mr. Heins added that even though BlackBerry is likely to experience bumps along the way — including a projected loss for the current quarter — he is looking to position the company for growth by the end of fiscal 2015.

“BlackBerry is still in the early phases of our transition,” Mr. Heins said. “This isn’t just the launch of a new product but a whole new platform. While many will judge us on the basis of one quarter of a single product, we are not a devices-only company.”

In addition to discussing the the roll out of the company’s trio of new BlackBerry 10 (BB10) smartphones, Mr. Heins was adamant that the company has embraced the “bring your own device trend” within enterprises and that BlackBerry is looking to position itself as a cross platform services company.

Earlier this year, BlackBerry started rolling out its new BlackBerry Enterprise Service 10 (BES 10) software to its enterprise customers. The new technology enables companies to use BlackBerry technology to manage not just BlackBerry smartphones, but also mobile devices built by rival companies such as Apple and Samsung.

“Our goal is to remain number one in enterprise mobility management,” Mr. Heins said.

“BES 10 is just a few months into its product life cycle, and the installations will continue to drive revenues for the company for years.”

Indeed, the roll out of the BES 10 service is also seen as key to driving BlackBerry smartphone sales figures; as more companies upgrade to the service, the addressable market for enterprise BlackBerry users increases.

Although some investors seemed pleased with the confident tone Mr. Heins struck during the AGM — BlackBerry shares rose as much as 3% during the meeting, eventually closing up just 1% — many analysts remain skeptical of the company’s chances of re-establishing itself as a major player in the smartphone industry without more positive financial results.

“The issue is that his confidence, without data, has little meaning to Wall Street,” said Peter Misek, a financial analyst with Jefferies & Co. in New York. “They have to execute and regain confidence.”

California-based technology analyst Rob Enderle said that while Mr. Heins has taken a number of positive steps with BlackBerry — including launching new products and streamlining supply lines — the trick will be to keep investors convinced of the company’s long term potential during the transition.

“Remember a turnaround takes time,” he said. “We typically talk about a turnaround taking five years, up to seven years … and in that time, they’re going to have hills and valleys. This is the most difficult part of a turnaround, because you have these valleys that the company has to plow through. I honestly think they’re doing everything they can to make this happen.”

BlackBerry shareholders also approved the election of the company’s nine-member board of directors, including the re-election of chair Barbara Stymiest, CEO Thorsten Heins and newcomers Bert Nordberg and Richard Lynch.